That amounts to as much as $32 billion this month on new vehicles—nearly $3 billion more than February 2015!
According to MediaPost, February will break a new record, marking the first time that consumers have ever spent more than $30 billion on vehicles in the month of February. And the news gets better for the industry: So far this month, leases and loans of 72 months or longer represent 65.1% of all retail sales, a record level for any month. J.D. Power says the previous record was set in January 2016 at 64.3%.
As a caveat, John Humphrey, senior VP of global automotive practice at J.D. Power, notes that “the year-over-year sales growth projection for February is strong, but we need to keep in mind that it is aided by the fact that sales in the upper East Coast, Midwest and Texas were hampered by weather last February.” So when February’s likely retail sales outcomes are extrapolated for the full year, the seasonally adjusted annualized rate of sales (SAAR) is still a solid 13.9 million units, vs. 12.8 million units last year. J.D. Power says it is the strongest retail SAAR in the month of February since 2002.
Jeff Schuster, senior VP of forecasting at LMC Automotive, tells MediaPost that February’s auto results show that consumers are not intimidated by the recent stock market roller coaster or higher interest rates. “Very low fuel prices and many new vehicles in showrooms should help drive another strong year for auto sales,” he said.